Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549



(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001
                               ------------------

                                       OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

For Quarter Ended September 30, 2001


                              TRANSNET CORPORATION
                              --------------------
             (Exact name of registrant as specified in its charter)


    DELAWARE                                             22-1892295
    --------                                              ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey          08876-3576
----------------------------------------        --------------
(Address of principal executive offices)        (Zip Code)

Registrant's Telephone Number, Including Area Code  908-253-0500
                                                    ------------


------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

    Yes __X__            No _____
          -

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 7, 2001: 4,774,804.



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                              TRANSNET CORPORATION

                                    FORM 10-Q

                                TABLE OF CONTENTS

                                                                        Page No.

PART I.  FINANCIAL INFORMATION

   Consolidated Balance Sheets
   September 30, 2001 and June 30, 2001                                 1

   Consolidated Statements of Operations
   Three Months Ended September 30, 2001 and 2000                       2

   Consolidated Statements of Cash Flows
   Three Months Ended September 30, 2001 and 2000                       3

   Notes to Consolidated Financial Statements                           4

   Management's Discussion and Analysis                                 5


PART II.  OTHER INFORMATION                                             7
-------   -----------------




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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEETS [UNAUDITED]
------------------------------------------------------------------------------



                                                       September 30,  June 30,
                                                       -------------  --------
                                                          2 0 0 1      2 0 0 1
                                                          -------      -------
Assets:
Current Assets:
  Cash and Cash Equivalents                             $3,237,154  $6,301,210
  Accounts Receivable - Net                             10,296,482   7,566,102
  Inventories                                            2,404,134   1,886,988
  Mortgage Receivable - Related Party                      250,000     250,000
  Other Current Assets                                      59,960     125,358
  Deferred Tax Asset                                       209,291     256,055
                                                        ----------  ----------

  Total Current Assets                                  16,457,021  16,385,713

Property and Equipment - Net                               491,204     530,969

Other Assets                                               233,170     235,469
                                                        ----------  ----------

  Total Assets                                          $17,181,395 $17,152,151
                                                        =========== ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                      $1,105,354  $  674,896
  Accrued Expenses                                         129,516     720,851
  Accrued Payroll                                          220,049     220,551
  Floor Plan Payable                                     2,093,813   2,229,152
  Deferred Income                                          100,000          --
                                                        ----------  ----------

  Total Current Liabilities                              3,648,732   3,845,450
                                                        ----------  ----------

Deferred Tax Liability                                      29,704      29,704
                                                        ----------  ----------

Stockholders' Equity:
  Capital Stock - Common, $.01 Par Value,  Authorized
   15,000,000 Shares; Issued 7,469,524 Shares [of
   which 2,694,720 are in Treasury at 2001 and
   2,614,200 in 2000]                                       74,695      74,695

  Paid-in Capital                                       10,686,745  10,686,745

  Retained Earnings                                     10,049,719   9,823,757
                                                        ----------  ----------

  Totals                                                20,811,159  20,585,197
  Less:  Treasury Stock - At Cost                       (7,308,200) (7,308,200)
                                                        ----------  ----------

  Total Stockholders' Equity                            13,502,959  13,276,997
                                                        ----------  ----------

  Total Liabilities and Stockholders' Equity            $17,181,395 $17,152,151
                                                        =========== ===========

See Notes to Consolidated Financial Statements.


                                        1

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                           Three months ended
                                                              September 30,
                                                          2 0 0 1      2 0 0 0
                                                          -------      -------

Revenue:
  Equipment                                             $13,194,159 $10,150,601
  Services                                               3,882,231   3,514,398
                                                        ----------  ----------

  Total Revenue                                         17,076,390  13,664,999
                                                        ----------  ----------

Cost of Revenue:
  Equipment                                             12,537,729   9,462,289
  Services                                               2,566,234   2,521,772
                                                        ----------  ----------

  Total Cost Revenue                                    15,103,963  11,984,061
                                                        ----------  ----------

  Gross Profit                                           1,972,427   1,680,938

Selling, General and Administrative Expenses             1,670,136   1,608,097
                                                        ----------  ----------

  Operating Income                                         302,291      72,841
                                                        ----------  ----------

Other Income:
  Interest Income                                           33,937      67,753
  Interest Income - Related Party                            5,672       5,672
                                                        ----------  ----------

  Total Other Income - Net                                  39,609      73,425
                                                        ----------  ----------

  Income Before Tax Expense                                341,900     146,266

Income Tax Expense                                         115,940      49,000
                                                        ----------  ----------

  Net Income                                            $  225,960  $   97,266
                                                        ==========  ==========

Basic Net Income Per Common Share                       $     0.05  $     0.02
                                                        ==========  ==========

Diluted Net Income Per Common Share                     $     0.05  $     0.02
                                                        ==========  ==========

Weighted Average Common shares Outstanding - Basic       4,815,872   4,855,304
                                                        ==========  ==========

Weighted Average Common shares Outstanding - Diluted     4,930,607   4,855,304
                                                        ==========  ==========


See Notes to Consolidated Financial Statements.


                                        2

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                           Three months ended
                                                              September 30,
                                                          2 0 0 1      2 0 0 0
                                                          -------      -------


Operating Activities:
  Net Income                                            $  225,960  $   97,266
                                                        ----------  ----------
  Adjustments to Reconcile Net Income to Net Cash:
   Depreciation and Amortization                            43,258      39,753
   Provision for Doubtful Accounts                          18,726      30,000
   Discounting of Deferred Charges                              --      52,052
   Deferred Income Taxes                                        --      42,736

Changes in Assets and Liabilities
  (Increase) Decrease in:
   Accounts Receivable                                  (2,669,409)   (234,223)
   Inventory                                              (517,146)   (404,503)
   Other Current Assets                                     32,466     (42,004)
   Other Assets                                             (1,194)       (978)

  Increase (Decrease) in:
   Accounts Payable and Accrued Expenses                  (161,378)    158,636
   Deferred Income                                         100,000          --
                                                        ----------  ----------

  Total Adjustments                                     (3,154,677)   (358,531)
                                                        ----------  ----------

Net Cash - Operating Activities                         (2,928,717)   (261,265)

Investing Activities:
  Capital Expenditures                                          --     (40,031)

Financing Activities:
  Floor Plan Payable-Net                                  (135,339) (1,049,049)
                                                        ----------  ----------

  Net (Decrease) in Cash and Cash Equivalents           (3,064,056) (1,350,345)

Cash and Cash Equivalents - Beginning of Periods         6,301,210   5,208,558
                                                        ----------  ----------

  Cash and Cash Equivalents - End of Periods            $3,237,154  $3,858,213
                                                        ==========  ==========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
   Interest                                             $       --  $       --
   Income Taxes                                         $  428,750  $    6,265

Supplemental Disclosure of Non-Cash Investing Activities:


See Notes to Consolidated Financial Statements.


                                        3

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TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information as of September 30, 2001 and 2000 is unaudited)
------------------------------------------------------------------------------



(1)Summary of Significant Accounting Policies

(a) Consolidation: The consolidated financial statements include the accounts of
the Corporation and its wholly owned subsidiary,  Century American  Corporation.
Intercompany transactions and accounts have been eliminated in consolidation.

(b) Inventory: Inventory consists of finished goods. The Corporation's inventory
is valued at the lower of cost (determined on the average cost basis) or market.

(c) Cash and Cash Equivalents:  For the purposes of the statement of cash flows,
the  Corporation  considers  highly liquid debt  instruments,  purchased  with a
maturity of three months or less, to be cash equivalents.

(d) Earnings Per Share: Earnings per common share - basic are based on 4,815,872
weighted  shares  outstanding  for the period  ended  September  30, 2001 and on
4,855,304  weighted shares  outstanding for the period ended September 30, 2000.
Earnings  per common  share - diluted are based on  4,8930,607  weighted  shares
outstanding  for the period ended  September 30, 2001 and on 4,855,304  weighted
shares outstanding for the period ended September 30, 2000.

(2) Income Taxes

The  Corporation  has a  deferred  tax  asset of  $209,291  and a  deferred  tax
liability of $29,704 based upon temporary timing differences including inventory
capitalization,  allowance  for  doubtful  accounts,  vacation  pay accruals and
depreciation.

(3) Reclassification

Certain items from the prior year's financial  statements have been reclassified
to conform to the current year's presentation.

In the opinion of management,  the accompanying unaudited consolidated financial
statements   contain  all  adjustments   consisting  only  of  normal  recurring
adjustments  necessary to present fairly the financial position,  the results of
operations and cash flows for the periods presented.

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 2001.




                                        4

<PAGE>




                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Revenues for the quarter ended  September 30, 2001 were  $17,076,390 as compared
with $13,664,999 for the quarter ended September 30, 2000. For the quarter ended
September 30, 2001 the  Corporation  reported net income of $225,960 as compared
with net income of $97,266 for the corresponding period in 2000. The increase in
revenues is  primarily  due to an increase  in hardware  sales,  and to a lesser
extent to an increase in service revenues.

The  increase  in  earnings  for  the  quarter  ended   September  30,  2001  is
attributable  to the  increase in gross profit  margins on  technical  services,
which in turn is due to the increased demand for higher end, more  sophisticated
technical services.  Management concentrates it efforts on technical service and
support,  and on sales of network and system  integration  products  which yield
higher profit margins, and continues its adherence to and implementation of cost
control measures. Service and training related revenues are significant in their
contributions  to earnings because these operations yield a higher profit margin
than  equipment  sales.  In addition to the technical  service sales  referenced
above,  for the quarter ended  September 30, 2001, the increase in revenues from
the  provision  of service,  support,  outsourcing  and network  integration  is
largely the result of the  Corporation  renewing  and/or  entering  into service
contracts with a number of large  corporate  customers.  Many of these contracts
are  short-term,  usually  twelve months or less, and contain  provisions  which
permit early  termination.  Although the  contracts  generally  contain  renewal
terms, there is no assurance that such renewals will occur.

During the fiscal years discussed, the computer industry has experienced a trend
of decreasing  prices of computers and related  equipment.  Management  believes
that this trend will  continue.  Industrywide,  the result of price  erosion has
been lower profit margins on sales,  which require  businesses to sell a greater
volume of equipment to maintain past earning levels. Another result of the price
decreases has been intensified  competition  within the industry,  including the
consolidation  of businesses  through merger or  acquisition,  the initiation of
sales by certain  manufacturers  directly to the  end-user  and the  entrance of
manufacturers  into technical services  business.  Management  believes that the
adoption of policies by many larger corporate customers,  which limit the number
of vendors  permitted to provide  goods and services  for  specified  periods of
time, has further increased price competition.

The Corporation's  performance is also impacted by other factors,  many of which
are not within its control.  These factors  include:  the  short-term  nature of
client's  commitments;  patterns of capital spending by clients;  the timing and
size of new projects;  pricing changes in response to competitive  factors;  the
availability  and related  costs of qualified  technical  personnel;  timing and
customer  acceptance  of  new  product  and  service  offerings;  trends  in  IT
outsourcing;  product constraints; and industry and general economic conditions,
which have become more uncertain since September 11, 2001.

To meet these competitive  challenges and to maximize the  Corporation's  profit
margin,  management has modified its marketing  strategy  during these years and
has  enforced  expense  controls.  Management  also  utilizes new trends such as
manufacturers'  direct  shipment  and billing of the  customers  in exchange for
payment to the  Corporation  of an "agency  fee" as a means to reduce  equipment
related costs while increasing profits.  Management's current marketing strategy
is designed to shift its focus to provision  of technical  services and to sales
of lower  revenue/higher  profit margin products  related to service and support
operations.  Management's efforts include targeting commercial,  educational and
governmental customers who provide marketplaces for a wide range of products and
services at one time, a cost- effective approach to sales. These customers often
do not have their own technical  staffs and  outsource  their  computer  service
requirements  to companies  such as TransNet.  Management  believes it maximizes
profits through concentration on sales of value-added applications; promotion of
the Corporation's  service and support operations;  and strict adherence to cost
cutting controls. In light of the above, management emphasizes and continues the
aggressive  pursuit of an  increased  volume of sales of  technical  service and
support programs,  and promotion of its training services. In the near term, the
Corporation  believes that product sales will continue to generate a significant
percentage of the Company's  revenues.  In addition,  the  Corporation's  buying
agreement with Ingram Micro, Inc.  enhances the  Corporation's  competitive edge
through product discounts unavailable through other sources.

                                        5

<PAGE>





Although actual expenses  increased due to increased  personnel costs,  selling,
general and  administrative  expenses  decreased to approximately 10% of revenue
for the first  quarter of fiscal 2002 as a result of the  increase in  revenues.
Selling,  general and administrative expenses were approximately 12% of revenues
for the same quarter in fiscal 2001. Management continues its efforts to control
and reduce administrative and personal related costs.

Interest income  decreased in the 2001 quarter as compared to 2000 primarily due
to the lower amount of cash invested.

Liquidity and Capital Resources

There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under which such inventory secures the amount  outstanding.  Floor
planning  payables  decreased in the 2001 period  compared to the same period in
2000 as the result of payment made by the  Corporation.  Inventory  increased in
the quarter ended September 30, 2001 as compared to the corresponding  period in
2000 in response to the increased volume of hardware sales.

Accounts  receivable and payable  increased for the quarter ended  September 30,
2001 as compared to the same period in 2000 as a direct  result of the  increase
in revenues.  Cash levels decreased in the three months ended September 30, 2001
as compared to the corresponding period in 2000 as a result of expenses required
to increase inventories directly related to increased hardware sales.

For the fiscal quarter ended  September 30, 2001, as in the fiscal quarter ended
September 30, 2000, the internal resources of the Corporation were sufficient to
enable the Corporation to meet its obligations.

In the first  quarter of fiscal 1998,  management  was apprised of an unasserted
possible claim or assessment involving the Corporation's  Pension Plan. The Plan
was adopted in 1981 as a defined  benefit  plan. In 1989,  various  actions were
taken by the  Corporation  to  terminate  the Plan,  to  convert it to a defined
contribution plan and to freeze benefit accruals. No filing for plan termination
was  made  with  the  Pension  Benefit   Guaranty   Corporation   (the  "PBGC").
Additionally,  a final  amended and restated  plan  document  incorporating  the
foregoing  amendments and other required amendments  including those required by
the Tax  Reform  Act of 1986 do not  appear to have been  properly  adopted.  In
addition, since 1989, it appears that certain operational violations occurred in
the  administration  of the Plan including the failure to obtain spousal consent
in certain instances where it was required.

The  Corporation  decided to (i) take  corrective  action  under the IRS Walk-in
Closing  Agreement Program ("CAP"),  (ii) applied for a favorable  determination
letter with respect to the Plan from the IRS, and (iii)  terminate the Plan. The
CAP program  provides a  correction  mechanism  for  "non-amenders"  such as the
Corporation.  Under CAP, the Corporation was subject to a monetary sanction.  In
addition,  the Corporation was required to correct,  retroactively,  operational
violations,  and to pay  any  resulting  excise  taxes  and  PBGC  premiums  and
penalties  that  may be due.  In this  regard,  in  connection  with  settlement
negotiations with the IRS, during the December 2000 quarter the Corporation made
a contribution to the Plan and made payment of specified  sanctions.  During the
March quarter, the Corporation finalized a settlement agreement with the IRS and
is awaiting resolution with the PBGC.

The matters  discussed in  Management's  Discussion  and Analysis and throughout
this report that are forward-looking  statements are based on current management
expectations   that  involve  risk  and   uncertainties.   Potential  risks  and
uncertainties  include,  without  limitation:  the impact of economic conditions
generally  and  in  the  industry  for  microcomputer   products  and  services;
dependence  on key  vendors and  customers;  continued  competitive  and pricing
pressures in the industry;  product supply shortages;  open-sourcing of products
of vendors,  including direct sales by manufacturers;  rapid product improvement
and technological  change, short product life cycles and resulting  obsolescence
risks; technological developments; capital and financing availability; and other
risks set forth herein.


                                        6

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                                    PART II.
                                OTHER INFORMATION



Item 6:  Exhibits and Reports on Form 8-K

      A.  Exhibits - None required to be filed for Part II of this report.

     B.  Reports on Form 8-K - None  filed  during  the  quarter  for which this
report is submitted.



                                        7

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                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      TRANSNET CORPORATION
                                      (Registrant)



                                      /s/ Steven J. Wilk
                                      ------------------
                                      Steven J. Wilk, President




                                      /s/ John J. Wilk
                                      ----------------
                                      John J. Wilk,
                                      Principal Financial and Accounting Officer
                                      and Chairman of the Board of Directors


DATE:  November 14, 2001


                                        8

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